Automotive Operating Systems Market Trends

Growth Drivers

• Surge in sales of connected and autonomous vehicles: As the automotive industry is becoming more software-defined, there has been a rising demand for ultra-modern OS platforms with the expansion of the sector. As reported by the International Energy Agency in July 2025, EV sales in the first quarter of 2025 increased by 35% compared to the first quarter of the previous financial year. There has been a surge in intricacies in modern driver assistance systems, over-the-air updates, and infotainment. Prominent companies launched the Automotive OS, that are widely adopted by end users operating across different sectors. Also, automotive giants Volkswagen and Bosch are infusing money into automotive OS for level 4 autonomy.
• Rising investment in Mobility-as-a-Service: The automotive operating system market growth can be attributed to the surge in MaaS services such as Ola, Uber, and Didi.  Through the New Energy Vehicle Development Plan, the governments are supporting automotive organizations with subsidies for accumulating robotaxis and MaaS. Companies are also taking strategic initiatives for the development of Mobility-as-a-Service. For instance, in May 2023, DiDi Autonomous Driving unveiled its joint venture with GAC AION New Energy Automobile Co., Ltd. for the mass production of electric robotaxi under the joint project, AIDI. These factors influence a surge in demand for AOS.
• Regulatory push for vehicle electrification: According to data published by the International Energy Agency (IEA), global penetration of EVs is projected to hit 65% of car sales by 2030. An advanced automotive OS is needed to operate the electric vehicle battery systems, connectivity, and powertrains. As reported by the State Council in June 2023, the purchase tax exception for NEVs borrowed in 2024 and 2025 in China was around USD 4,178.5 thousand. Also, countries in Europe are aiming for real-time energy management OS, fueling the market growth during the coming decade.

Challenges

• Strict laws for data protection: The stringent data protection laws from various countries lead to a rise in compliance costs and slow down the software deployment time. General Data Protection Regulation (GDPR) in the EU obstructs the flow of crucial updates across the border. Similarly, in August 2023, the government of India introduced a new version of the Digital Personal Data Protection Act, 2023 (DPDP Act).
• Lack of harmonized global standards: The uneven regulatory frameworks and the presence of fragmented global standards for OS are restraining the market growth and causing increasing development costs. GDPR in the EU, CCPA in the U.S., and PIPL in China have different mandates for the development of operating systems.